The Scottish Parliament may be headed for another vote on the controversial Edinburgh tram project as compulsory land purchase orders for the Granton spur line are set to expire.

Compulsory purchase rights for land for tram line 1b, also known as the Granton spur, are due to expire in May of next year.

If the land is not purchased before May, an act of parliament or an order from ministers would be required to secure the land.

Edinburgh Council leaders say buying the land now was “likely to be controversial” and expensive given there is no guarantee the spur will ever be built and the council is already struggling to fund the completion of line 1a to Newhaven.

Edinburgh Council is nearly £1.5 billion in debt with a budget deficit of £141 million and rising, but the executive believes a tram line to Newhaven would yield a net economic benefit.

The trams project was originally to extend to three main lines and was estimated would cost a total of £375 million to complete, with two of the three lines expected to be running by the summer of 2009.

Holyrood approved a £500 million finding package to build the tram scheme against the wishes of the then minority SNP government.

The one line tram system, running 8.7 miles from Edinburgh Airport to York Place in the city centre, opened in 2014, five years late and around £400 million over budget.

Most recent estimates on the overall cost to complete just one line of the project – including interest on forward funding – is expected to top £1 billion.

The council is set to vote on a programme of preparatory works on Thursday to extend the tram line to Newhaven, but is expected to delay a final decision until the middle of 2017.

A £3.25 million package to fund preparatory work is expected to be approved after the council decided in principal last month to extend the tram network from York Place to Newhaven at an estimated cost of £144.7 million.

However the November 19 vote in favour of extending the line to Newhaven does not guarantee the work will go ahead.

The council has asked Lothian Buses for an “extraordinary dividend” from its council shares of £20 million to fund more advanced work, however Lothian Buses chairman said it can't commit the funds until its strategic plan is published in September 2016.

A report going before the council on Thursday states: “The compulsory purchase powers set out in the line one act cease on May 7 2016 and there is no scope for a further extension within the Act.

“Consideration has been given to exercise the existing powers before May 7 2016 (but) this is not considered the best way forward. “Acquiring the land without certainty over whether phase 1b will proceed is likely to be controversial and objectors may seek to challenge the process.

“There could also be reputational issues to consider if the council proceeds to acquire compulsorily the remaining land without having certainty over whether it intends to proceed with the extension of the current Edinburgh tram network.

“If the council were to not exercise its CPO rights and seek to acquire the land after the expiry of the powers, the council could either promote a new private bill or apply for a transport & works order.

“Both options would take time to conclude, may be complex and are not without risk.

“Given the issues in relation to exercising existing powers, it is recommended that further work is done in the first quarter of 2016 to set out in detail the process for pursuing either a new private bill or a transport & works order.”